Kumaramputhur Service Co-operative Bank Ltd. v Abdul Hameed

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** ## **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **&** ## **THE HONOURABLE MR.JUSTICE VIJU ABRAHAM** **WEDNESDAY, THE 12[TH] DAY OF JANUARY 2022 / 22ND POUSHA, 1943** **WA NO. 1494 OF 2021** **AGAINST THE JUDGMENT DATED 30.06.2021 IN WP(C) NO.25471/2019 OF HIGH** ## **COURT OF KERALA** **APPELLANT/RESPONDENT NO.2:** **KUMARAMPUTHUR SERVICE CO-OPERATIVE BANK LTD.NO. P373, MANNARKAD COLLEGE P.O., PALAKKAD - 678 583, REP. BY ITS SECRETARY.** **BY ADVS. K.T.THOMAS MATHEW BOB KURIAN** ## **RESPONDENTS/PETITIONER & RESPONDENT NO.1:** **1 ABDUL HAMEED SON OF MIUHAMMED, CHEERATHADAYAN HOUSE, MANNARKAD COLLEGE P.O., PALAKKAD , SECRETARY (RETD.), KUMARAMPUTHUR SERVICE CO-OPERATIVE BANK LTD.NO.P373, MANNARKAD COLLEGE P.O., PALAKKAD - 678 583.** **2 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) PALAKKAD - 678 001.** **SRI.SAIGI JACOB PALATTY, SR.GOVT.PLEADER, SMT.ANITHA RAVINDRAN** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 12.01.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.A No.1494 of 2021 2 ## **(CR)** # **ALEXANDER THOMAS & VIJU ABRAHAM, JJ.** # **================================= W.A No.1494 of 2021** [ _arising out of the impugned judgment dated 30.06.2021 in W.P(C) No.25471/2019_ ] **=================================** Dated this the 12[th] day of January, 2022 ## **JUDGMENT** ## **Alexander Thomas, J.** The first respondent herein has filed the instant Writ Petition (Civil), W.P(C) No.25471/2019 with the following prayers : - _“i) to declare that the petitioner is legally entitled to get interest at 9% on the amount of Rs.18,41,497/- from the 1-7-2016 to 6-72019 and that the 2[nd] respondent is legally liable to pay the same forth with;_ - _ii) issue a writ of certiorari or any other appropriate writ, order direction calling for the records leading to Ext.P5 and quash the same;_ - _iii) issue a writ of mandamus or any other appropriate writ, order or direction commanding the 1[st] respondent to consider and dispose of Ext.P6;_ - _iv) such other appropriate writ order or direction as this Honourable Court may deem fit and proper to meet the ends of justice.”_ ## 2. The learned Single Judge after hearing both sides has rendered the impugned judgment on 30.06.2021 finally disposing of the abovesaid W.P(C) No.25471/2019, with the finding that irrespective as to whether the writ petitioner had made the plea for grant of interest on the delayed payment of retirement benefits in the previous round of writ litigative W.A No.1494 of 2021 3 proceedings. The fact of the matter is that his retirement benefits were withheld for three years and that keeping in view of those circumstances and also taking note of those aspects, it was directed that the respondents in the W.P(C) shall grant interest @6% per annum to the petitioner on the retirement benefits and that the said order shall not be considered as a precedent. 3. Heard Sri.K.T.Thomas, learned counsel appearing for the appellant in the W.A/R2 in the W.P(C) [Co-operative Society employer], Sri.B.S.Swathi Kumar, learned Advocate instructed and assisted by Smt.Anitha Ravindran, learned counsel appearing for R1 in the W.A/writ petitioner and Sri.Saigi Jacob Palatty, learned Senior Government Pleader appearing for R2 [Joint Registrar of Co-operative Societies] in the W.A/R1 in the W.P(C). 4. The 1[st] respondent herein (referred for short as 'writ petitioner') had earlier filed Annexure-A1 writ petition (civil), W.P(C) No.6295/2018 before this Court with the following prayers: - _“i) to declare that the petitioner is legally entitled to be disbursed with the amount due to him under Death-cum-retirement benefits and leave surrender and that the denial to disburse the same by the 2[nd] respondent is highly illegal, arbitrary, vitiated with violation of the rules and regulations and extraneous consideration hence legally unsustainable and liable only to be quashed;_ _ii) issue a writ of mandamus or any other appropriate writ, order_ W.A No.1494 of 2021 4 _direction calling for the records leading to Ext.P6 and quash the same;_ - _iii) issue a writ of mandamus or any other appropriate writ, order or direction commanding the 2[nd] respondent to disburse the amounts due as Death-cum-retirement benefits and leave surrender to the petitioner forthwith;_ - _iv) such other appropriate writ order or direction as this Honourable Court may deem fit and proper to meet the ends of justice.”_ 5. Therein, the learned Single Judge, after hearing both sides has rendered Ext.P-2 judgment dated 24.06.2019 in the said W.P(C) No.6295/2018 finally disposing of the said W.P(C), ordering that R2 therein [Co-operative Society employer] shall hear the writ petitioner and take a decision on the disbursal cum retirement benefits, so that he can obtain the same without any further delay, etc. and that if any amounts are found due to the petitioner as being his retirement benefits and DCRG (Death-cum-Retirement Gratuity), the same shall be disbursed within a period of one month, etc. It would be relevant to note that in the previous round of writ litigative proceedings initiated by the present writ petitioner as per Annexure-A1 W.P(C) No.6295/2018, no prayer has been made therein for grant of interest on the delayed payment of the retirement benefits including the DCRG. Hence, the learned Single Judge while rendering Ext.P-2 judgment in the said W.P(C), has not ordered for the grant of interest therein. W.A No.1494 of 2021 5 6. It appears that in compliance with the directions issued by this Court as per Ext.P-2 judgment dated 24.06.2019 in W.P(C) No.6295/2018, the matter was considered by the appellant herein [R1 in the W.P(C) – Co-operative Society employer]. The present writ petitioner had served as an employee of the appellant Co-operative Society and while holding the post of Secretary of the said society, he had retired from service on 31.05.2016. Even prior to the retirement of the writ petitioner from service, one of the members of the said appellant-Co-operative Society, had approached this Court by filing Ext.R2(a) W.P(C) No.17892/2016 seeking for a direction to restrain respondents 2 to 4 therein (Joint Registrar of Co-operative Societies & the officials of the present Co-operative Society), from releasing the retirement benefits due to R6 therein (present writ petitioner) during the pendency of the proceedings under Secs.65, 68 or other provisions of the Kerala Cooperative Societies Act, 1969 and for other related reliefs. The said writ proceedings culminated in Ext.R2(a) judgment dated 23.05.2016 in the said W.P(C) No.17892/2016, wherein this Court noted that there was serious allegations of misappropriation and malpractices against the managing committee of the society and an enquiry under Sec.65 of the Act was conducted and in the enquiry, it was reported that apart from the W.A No.1494 of 2021 6 members of the managing committee, the Secretary of the said society viz. the present writ petitioner has also caused huge loss to the society. It was found that the matter of grant of gold loan, the society had suffered a loss of about Rs.81,16,000/- (Rupees Eighty one lakh Sixteen Thousand only) and that in the case of construction of building, purchase of generator, etc., the said society had suffered a loss of Rs.59,11,638/- (Rupees Fifty Nine lakh Eleven Thousand Six Hundred and Thirty Eight only). Further it was also noted that there was a contention that vigilance case was also pending. The petitioner therein contended that the enquiry report under Sec.68 of the Act has already been submitted against the Secretary as well as the members of the managing committee of the society and that disregarding the said enquiry report and proceedings under Sec.68 of the Act, the 4[th] respondent therein namely, the Administrative Committee & the Co-operative Society, is taking hasty steps to release retirement benefits due to R6 therein (the present writ petitioner) and it was contended that the benefits are released to the present writ petitioner, the society will not be able to recover the loss due to the alleged legal acts of the 6[th] respondent therein (writ petitioner herein). The learned Single Judge in Ext.R2(a) judgment noted that the representations as per Exts.P-4 & P-6 therein were filed by the petitioner therein before R2 & R4 W.A No.1494 of 2021 7 therein, etc. Accordingly, this Court ordered as per R2(a) judgment that direction to be given to the respective statutory authorities before whom Exts.P-4 & P-6 were pending and that accordingly, it was ordered that R2 & R4 therein (Joint Registrar of Co-operative Societies & the Administrative Committee of the Co-operative Society), shall consider the representations as per Exts.P-4 & P-6 therein filed by the writ petitioner therein and take decisions thereon, within two months, etc. It appears that in pursuance of the directions issued by the learned Single Judge in the instant Ext.R2(a) judgment dated 23.05.2016 in W.P(C) No.17892/2016, the respondent-Joint Registrar of Co-operative Society has issued Ext.R2(b) proceedings dated 26.08.2016 stating that the DCRG and the leave surrender amounts cannot be released to the present writ petitioner, as the proceedings under Sec.68 of the Act for surcharge was pending finalization and presumably in view of the provisions contained in Rules 198(7) & 198(8) of the Kerala Co-operative Societies Rules. 7. Sub Rules (7) & (8) of Rule 198 of the Kerala Co-operative Societies Rules provides as follows : ## “ _**Rule 198. Disciplinary Action** :-_ **==> picture [97 x 10] intentionally omitted <==** **==> picture [100 x 9] intentionally omitted <==** _**(7)** In the event of any pendency of disciplinary proceedings_ W.A No.1494 of 2021 8 _against any employee of a co-operative society or any cooperative institution pursuant to any charge of grave misconduct, irregularity, corruption or other charge involving moral turpitude, no retirement benefits shall be sanctioned to such employee or retired employee and in case of sanctioning of any retirement benefits to any such employee or retired employee, the name and designation of the sanctioning authority together with the reason for such sanctioning shall be recorded by the sanctioning authority by himself and such authority shall be held responsible for any loss to the society owing to such sanctioning of retirement benefits if found that such sanctioning was unwarranted._ _**(8).** In respect of all employees save the Chief Executive Officer of a society, no retirement benefits shall be sanctioned and disbursed until after the due issuance of a Non-liability Certificate by the Chief Executive Officer and approval of the same by the committee of the society within thirty days from the date of retirement of such employee. In the event of the retirement of the Chief Executive Officer, the Non-liability Certificate shall be issued by the committee of the society. For any loss to the society due to the non adherence of the forgoing procedure, the Chief Executive Officer along with the committee of the society shall be held responsible collectively and severally in respect of the issuance of Nonliability Certificate to any employee other than the Chief Executive Officer and the members of the committee shall beheld collectively and severally responsible for the issuance of Non-Liability Certificate to the Chief Executive Officer.”_ 8. It appears that in pursuance of Ext.R2(b) proceedings dated 26.08.2016 rendered by the respondent-Joint Registrar of Co-operative Societies, the present appellant Co-operative Society has issued Ext.R2(c) proceedings dated 16.11.2017, intimating the writ petitioner about the outcome of the decision in Ext.R2(b) regarding withholding of the benefits for the reasons stated therein. It appears that it is after Ext.R2(a) judgment dated 23.05.2016, Exts.R2(b) & R2(c) proceedings dated W.A No.1494 of 2021 9 26.08.2016 & 16.11.2017 respectively, that the writ petitioner herein has filed aforementioned Annexure-A1 W.P(C) No.6295/2018 on 17.02.2018, which culminated in Ext.P-2 judgment dated 24.06.2019 in the said W.P(C) No.6295/2018. 9. In compliance with the directions issued by the learned Single Judge in Ext.P-2 judgment in W.P(C) No.6295/2018 dated 24.06.2019, filed by the present writ petitioner, it appears that the appellant-Cooperative Society employer has heard the writ petitioner and passed a proceedings on 06.07.2019, ordering the release of the withheld gratuity amount and the leave surrender amount to the writ petitioner. It is thereafter, that the present writ petition (civil), W.P(C) No.25471/2019 has been filed by the writ petitioner with the prayer for grant of interest on the delayed payment of the abovesaid benefits. The 2[nd] respondent in the present W.P(C) [appellant herein] has filed a counter affidavit dated 12.11.2019 in the present W.P(C), wherein it has been inter alia averred in para.10 thereof that though there was serious findings regarding alleged loss caused to the society by the writ petitioner, etc., For the purpose of compliance, the directions in Ext.P-2 judgment, the retirement benefits due to the petitioner were disbursed on 06.07.2019 within the deadline fixed by this Court, etc. We are apprised that Ext.P-1 produced in the W.A No.1494 of 2021 10 present W.P(C) is the enquiry report dated 15.11.2018 issued by the respondent-Joint Registrar of Co-operative Societies in the proceedings under Sec.68 of the Act, wherein the specific findings are made therein in the last paragraph thereof, which reads as follows : " ക�രള സഹ�രണ ന�യമ� വ��പ� 65 പ���ര� സമർപ�ച�ട�ള എൻ���യറ� റ�കപ�ർട� ക�ജ 56 മ�തൽ 62 �!ട�യ ക�ജ��ള�ൽ (എകസ�.1 ) �റഞ�ട�ള ��ര&ങൾ തന*യ�ണ ക,ങ�ൽ നട*�ട�ളത. അ�ഗങള�നട ന�ക1�വ�� ജ�ല3 സഹ�രണ ക,ങ�ൽ ന�*�� �&�ഷ നപ�ഡ�റ�� ന��ണ� പ�വർത�ക�* ക,ങ�നനറ ഫണ��ൾ വ�ന�കയ�ഗ�ക�*ത�ന അ*നത ഭരണസമ�ത�യ�� ക,ങ�നനറ അ*നത നസനപ�ടറ�യ�� അന�സകയ�നടയ�ണ വളനര അവര�നട �ർതവ&ങൾ ന>യത�ട�ളത എ*� ��ണ�വ�*ത�ണ. കമപട� ഭരണ സമ�ത�നയ സഹ�രണ ന�യമ� വ��പ� 32 പ���ര� ന@ക� ന>യ��യ�ണ�യ�ട�ണ�. കമപട� ഭരണ സമ�ത�യ�നട ��ലയളവ�ൽ വ�തരണ� ന>യത�ട�ളത�� 65 - ആ� വ��പ� പ���രമ�ള റ�കപ�ർട�ൽ �ര�മർശ�ച�ട�ളത�മ�യ NAST, NAMT വ�യപ�ള�ൽ ന�ലവ�ൽ ,�ക�ന�ൽക�* ഈട�ക�ന�ളത�യ�ട�ള വ�യപ�ള�ൽ മ�ഴ�വൻ എണവ�� ഇ.��/ എ.ആർ.സ� നട�ട��ള�ല�ണ. ഇവയ�നല നട�ട��ൾ ത�ടര�* സ�ഹ>ര&ത�ൽ ഇക�ര&ത�ൽ ,�ധ&ത ഫ�കI ന>കയണ സ�ഹ>ര&� ന�ലവ�ൽ .” ഇല3 എ*�� റ�കപ�ർട� ന>യത� ന��ള�*� A reading of the last paragraph of Ext.P-1 enquiry report dated 15.11.2018 would reveal that there were indeed supervisory laches on the part of the writ petitioner in his functioning as Secretary of the Bank, which led to the causing of serious loss to the society, etc. It is the case of the appellant that taking note of the directions issued by this Court in Ext.P-2 judgment with a time deadline therein, that the appellant-co-operative society had W.A No.1494 of 2021 11 taken a sympathetic view and had directed the release of the due amounts to the writ petitioner, as per the aforementioned proceedings dated 06.07.2019. Further that, the abovesaid findings in Ext.P-1 surcharge enquiry reports submitted by the Joint Registrar of Co-operative Societies, is still in force and has not been altered in the manner known to law. It is pointed out by the appellant that a sympathetic view was taken in the matter, inspite of the specific findings made in Ext.P-1 enquiry report. 10. Though no interest was claimed in the previous round of writ litigative proceedings at Ext.P-2 W.P(C) No.6295/2018, the main prayer in the present W.P(C) No.25471/2019 is for the grant of interest on the delayed payment of the retirement benefits. The learned Single Judge after hearing both sides has ordered that irrespective as to whether a plea for interest has been made in the previous round of litigative proceedings at Ext.P-2, taking note of the fact that the writ petitioner is suffering from cardiac ailments, it is ordered to grant him interest on the delayed payment of the above benefits @6% p.a and ordering that the same shall not be treated as a precedent, etc. 11. The main ground urged by Sri.K.T.Thomas, learned counsel appearing for the appellant is that for the very same cause of action in the matter of payment of the delayed terminal benefits like DCRG and leave W.A No.1494 of 2021 12 surrender, etc., the writ petitioner had filed the earlier round of writ litigative proceedings at Ext.P2 W.P(C) No.6295/2018, wherein there is no prayer for grant of interest on the delayed payment of the due amounts, as can be seen from a reading of Annexure-A1 W.P(C). Hence, that after having invited Ext.P-2 judgment, the writ petitioner cannot seek additional prayers on the very same matter by claiming grant of interest on the delayed payment of the benefits and that the plea of the writ petitioner is barred by res-judicata and constructive res-judicata, etc. 12. Sri.B.S.Swathi Kumar, learned counsel appearing for R1 herein/writ petitioner would strongly urge that notwithstanding the omission to make the prayer for grant of interest in Annexure-A1/Ext.P-2 previous W.P(C), the delayed payment of gratuity and leave surrender amount, etc., is unlawful deprivation of property and hence, there is violation of the property right of the writ petitioner conferred as per Article 300A of the Constitution of India. Further that, the Central Payment of Gratuity Act also speaks about grant of interest, etc. To this, Sri.K.T.Thomas, learned counsel appearing for the appellant would also contend that the said argument of the writ petitioner is not tenable and that the present plea of the writ petitioner for grant of interest is squarely barred by principles of _res-judicata_ and constructive _res-judicata_ . W.A No.1494 of 2021 13 Further that, a Division Bench of this Court in the case in _**Rashtriya Sanskrit Sansthan (Deemed University)** v._ _**K.Sarala Devi & anr.**_ {2021 (4) KHC 268}, has held that the plea of res-judicata can be raised in an _intra court_ appeal even though it was not raised in writ petition, etc. In the instant case it is true that the plea based on bar of resjudicata, etc., has not been raised in the counter affidavit filed by the appellant herein in the present W.P(C). However, a specific ground in that regard has been raised in Ground No.B of the present writ appeal. Sri.K.T.Thomas, learned counsel appearing for the appellant would also point out that it is not as if the appellant-co-operative society is taking a inhumane stand against a retired employee. But the fact of the matter is that the adverse findings against the writ petitioner as contained in Ext.P-1 enquiry report of the Joint Registrar under Sec.68 of the Kerala Co-operative Societies Act would clearly show the serious supervisory laches of the writ petitioner as Secretary of the Society, which led to the loss suffered by the Society, etc. Further that, the provisions contained in Rule 198 (7) & Rule 198 (8) of the Kerala Co-operative Societies Rules, legally obliged the society to withhold the abovesaid terminal benefits, in view of the pendency of the abovesaid allegations and proceedings and that, it is even mandated in the said Rules that if the officers of the society W.A No.1494 of 2021 14 sanction and release the said benefits, then action will have to be take against them. That the writ petitioner has not challenged vires of the abovesaid statutory rules as per Rule 198(7) & Rule 198(8) of the Rules. Further that, the appellant-co-operative society is bound by these rules and therefore, they had valid reasons for withholding the benefits and if they have released it earlier, action will have to be taken against the officials concerned of the co-operative society in view of the mandate contained in the abovesaid statutory rules and that therefore, there is sufficient legal grounds to justify the delay, etc. 13. After hearing both sides, we are of the view that since the present writ petitioner has not raised the abovesaid plea for grant of interest in the previous round of writ litigative proceedings at Annexure-A1/Ext.P-1 and liberty to claim the said plea for grant of interest has not been reserved either in Ext.P-1 judgment or subsequently by any other proceedings like review, application for modification or clarification, etc., the present plea for grant of interest is barred by principles of res- judicata and constructive res-judicata, in the facts and circumstances of the case. True that, the appellant has not raised his plea of bar in their pleadings submitted in the counter affidavit filed in the above W.P(C). But, the said plea based on the said bar is specifically raised in Ground-B W.A No.1494 of 2021 15 of the present W.A. The Division Bench of this Court has already held in the decision in _**Rashtriya Sanskrit Sansthan (Deemed University)** v._ _**K.Sarala Devi & anr.**_ {2021 (4) KHC 268} that the plea of resjudicata can be raised in an _intra court_ appeal filed under Sec.5(i) of the Kerala High Court Act as in the instant case, even though it was not raised in the writ proceedings by the party concerned. Further, we take note of the fact that the learned Single Judge has observed that the writ petitioner was suffering from cardiac ailments and that the said direction to grant interest @6% p.a. shall not be considered as a precedent, etc. The issue before us is whether the said directions inspite of the bar of res-judicata and constructive res-judicata, can be said to be a reasonable and proper exercise of the discretionary power of the writ court, in the facts and circumstances of this case. We note the specific findings made by the respondent-Joint Registrar in Ext.P-1 enquiry proceedings. We also take note the contention of the appellant-Society based on Rules 198(7) & 198(8), as above. The vires of the said statutory rules have not been raised by the writ petitioner. Further, we also note the specific findings made by the respondent-Joint Registrar in Ext.P-1 enquiry report as against the present writ petition as well, about which the reference is made in the last paragraph of Ext.P-1 as extracted W.A No.1494 of 2021 16 hereinabove. We are examining these aspects, only to decide whether the directions of the learned Single Judge to grant interest, inspite of not raising such plea in the previous litigative round can be said to be a reasonable and proper exercise of discretion. We make it clear that we have not examined the reasonableness in the workability or the vires of Rules 198(7) & (8). As those issues are not raised in the present case, we leave open all such issues regarding those rules in appropriate cases, where it has been raised for adjudication. 14. Taking note of these aspects, we are of the view that the abovesaid submissions of Sri.K.T.Thomas, learned counsel appearing for the appellant will have to be countenanced. Hence, we are of the view that taking into account the facts of this case, more particularly, the aspects borne from Ext.P-1 enquiry report as well as the other aspects, it will not be proper for us to overrule the plea of the appellant based on res-judicata and constructive res-judicata, in the facts and circumstances of this case. In that view of the matter, we find that the appellant is entitle to succeed. Accordingly, it is ordered that the impugned judgment rendered by the learned Single Judge on 30.06.2021 in the instant W.P(C) No. 25471/2019, W.A No.1494 of 2021 17 will stand set aside. With these observations and directions, the above Writ Appeal will stand finally disposed of. **Sd/-** **ALEXANDER THOMAS, JUDGE** **Sd/VIJU ABRAHAM, JUDGE** vgd